Benchmark raised its price target on Hut 8 to $85 from a previous call of $78, arguing that the company’s recently announced AI data center agreement marks a step-change in the quality and durability of its cash flows.
In a note published Monday, analyst Mark Palmer reiterated a “buy” rating on the bitcoin miner-turned-infrastructure developer, saying Hut 8’s partnership with Anthropic and Fluidstack stands out from peer AI colocation deals due to its structure, counterparties, and downside protection.
Benchmark pointed in particular to the 15-year, triple-net lease covering the initial 245 megawatts of IT capacity at Hut 8’s River Bend campus in Louisiana. The agreement carries a base value of roughly $7 billion, includes a 3% annual rent escalator, and benefits from a payment backstop provided by Google, which Benchmark said materially reduces counterparty risk.
Palmer said Hut 8 avoided issuing equity or warrants, a common feature in comparable AI infrastructure transactions, while retaining full economic ownership of the asset. Benchmark estimates the initial River Bend tranche alone is worth about $7.6 billion, citing contracted cash flows and the scarcity of AI-ready power backed by an investment-grade counterparty.
Beyond the first phase, Benchmark highlighted what it described as “embedded expansion optionality,” including a right of first offer for up to 1,000 additional megawatts at River Bend and a separate framework to develop as much as 1.05 gigawatts across Hut 8’s broader pipeline alongside Anthropic.
The firm’s $85 price target, above Hut 8’s prior all-time high from 2021, is based on a sum-of-the-parts valuation that also factors in the company’s 60% stake in American Bitcoin and its bitcoin holdings.
Hut 8 shares were trading just under $50 Monday morning, near a long-term high set in October, according to The Block price data.
Hut 8 (HUT) stock price chart. Source: The Block/TradingView
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